Posts Tagged ‘Kanjorski’

I heard the headline earlier today but only after listening to this video now do I appreciate the depth of this. We know the Lehman Brothers collapse was serious but only now do we know to what extent. This was the economic version of the Russian missile crisis.

It also explains for the first time, the awkward and otherwise inexplicable overnight shift in TARP approach by Paulson.

Listen to the comments at 2 minutes 20 seconds and from then on. Kanjorski is the Chair of the Capital Markets Committee. The key comments are:

“it was about September 15th [note his days and dates don’t match] …. on Thursday at about 11 o’clock in the morning the federal reserve noticed a tremendous draw down of money market accounts in the United States to the tune of 550 billion dollars being drawn out in a matter of an hour or two. The Treasury opened up its window to help. They pumped 105 billion into the system and realised they could not stem the tide … they realised there was an electronic run on the banks and we closed it down” .

They decided to close down the operation and announced a guarantee of $250,000 per account so there would not be further panic out there. Thats what actually happened. If they had not done that ………………. the estimate was that by 2 o;clock that afternoon 5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States and within 24 hours the world economy would have collapsed.

Now we talked about what would have happened if that happened… the end of the economic and political system as we know it.

it would have taken 3 or 4 trillion to buy the bad bank assets, and UK came up with the idea of injection capital …. we only had 750 billion … so we did that